(Reuters) - Ignyta Inc is in advanced talks to sell itself, people familiar with the matter said on Thursday, just three years after the U.S. cancer drugmaker became a public company focused on precision drugs and diagnostics.
The deal would come as large pharmaceutical companies are locked in a race to acquire or license advanced cancer treatments, as more studies show that a broad-based combination of treatments has a high success rate in treating the disease.
Ignyta could make a decision about whether to sell itself as early as this month after negotiating with potential suitors, the two sources said, cautioning there was no certainty that a sale of the company would occur.
The sources asked not to be identified because the sale process is confidential. Ignyta did not immediately respond to requests for comment.
San Diego-based Ignyta has a suite of drugs in early stage development in its pipeline that use gene therapy to kill off the underlying diseases that drive cancer tumor growth. It has a market capitalization of $1 billion.
Ignyta’s rival, Loxo Oncology Inc, liscenced its cancer drug, larotrectinib, to German drugmaker Bayer AG last month for more than $1 billion, including milestones.
Both Ignyta and Loxo focus on targeting gene mutations that drive cancer, rather than targeting a particular type of tumor.
Ignyta originated as a molecular diagnostics company, and uses its diagnostics technology to identify patients who can benefit most from its gene-based treatments.
In October, Ignyta reported that its drug entrectinib, which focuses on a type of gene that causes a small portion of lung cancer tumors, has a 69 percent overall response rate for lung cancer in early stage trials.
This, along with other positive clinical data, contributed to Ignyta’s stock nearly tripling over the past year.
Entrectinib is Ignyta’s most advanced drug, and is beginning phase 2 trials. Ignyta has three other drugs in its pipeline undergoing early stage studies.
Earlier this year, cancer drugmaker Tesaro Inc explored a sale, but ultimately decided against a transaction because of disagreements over valuation.
In February, Japanese drugmaker Takeda Pharmaceutical Co Ltd completed an acquisition of Ariad Pharmaceuticals Inc for $5.2 billion.
Reporting by Carl O'Donnell in New York; Editing by Lisa Shumaker